Agenda item

The Head of Strategic Finance and Property introduced the report which set the scene for the Budget 2022/23 and the Medium Term Financial Plan (MTFP) 2022 – 2027.  It was noted that the Executive had previously provided guidance to Officers that the budget proposals should be: based on a Council Tax increase of £5; contract inflation of up to 4%,; that there be no inflation in other goods and service budgets; and a provision of 3% for the national pay award be made (which could be reduced by 0.25% of the 2021/22 pay provision carried forward as a result of the 1.75% final pay offer from the employer’s side). He further summarised the recommendations B – G as detailed within the report.

The Head of Strategic Finance and Property referred to savings requirements of £0.967 million in 2022/23 which was principally being driven by the costs in relation to Harlow and Gilston Garden Town (HGGT) and explained that there would be other costs in relation to the crossings over the River Stort.  Furthermore, Compulsory Purchase Orders would impact on the ability to fund the costs from reserves.  He referred to the establishment of a Major Applications Team which would oversee the HGGT applications which could generate  work over a 20 year period.

The Chairman thanked the officer and referred Members to the seven recommendations in the report. He said that that there were a lot of positives throughout the report. 

Councillor Townsend referred to the Equalities Impact Assessment (EIA) and queried the depth of investigations needed.  The Head of Strategic Finance and Property explained that the aim was to ensure that the budget did not impact on individuals who had protected characteristics and if it did, then an in-depth EIA investigation would be conducted.  On the issue of the New Homes Bonus and the Government’s response, the Head of Strategic Finance and Property said the Local Government Finance settlement  in the second week in December.  Based on the government consultation on the new system it was unlikely the council would receive any New Homes Bonus.  Until the Settlement and the consultaion response were announced, about the council did not know whether it would receive any  New Homes Bonus.

Councillor Stowe referred to the possible savings from letting out floor space in 2022/23 i.e. an achievement of £100k in the first year.  The Head of Strategic Finance and Property said that this referred to the overall savings estimate from the Transforming East Herts Programme and confirmed what the estimated transformation savings would be phased over several years and this was an initial estimate of delivery of those savings.

Councillor Curtis referred to the guidance to Officers on the budget and the request that there be no inflation in other goods and services and whether this was a reasonable assumption.  He questioned what might happen if there was an inflationary increase of 4 or 5% in other costs budgets.  The Head of Strategic Finance and Property explained that if there was an increase in stationery for example, then officers would be advised that they could not buy any stationery unless all had been used in the building.  He stated that inflationary provision had been made for major contracts, for example the waste contract, leisure and parks contracts and if utility bills increased, then there would be provision.  All other budgets were frozen. 

Councillor Curtis referred to risk, specifically in relation to the unknown risks.  He referred to the impact of the pandemic and that it was important to acknowledge that it was good to consider the unknown risks and whether the   council was protected and that it had sufficient resilience to those risks should they arise.   He asked how unknown risks were planned for in relation to the development of the Medium Term Financial Plan.

The Head of Strategic Finance and Property explained that the council kept a general fund balance and a level of reserves which was designed to meet risk and as the Section 151 Officer, he was required to report the adequacy of those balances to Council under Section 25 of the Local Government Act 2003.  He referred to the known risks and that the unknown risks were just that, unknown.  He explained that there was a certain level of cash flow and contingency balances which he recommended  the  Council should keep to protect itself from risks, including unforeseen risks. Councillor Curtis referred to the Planning Department and welcomed the decision to have a major applications team, supported by a budget to handle the major applications coming through and in delivering the District Plan.  In relation to funding and major developments happening in East Hertfordshire, he asked if any approach had been made to Central Government to get financial assistance to help support the council and officers to get the right development in East Herts which complied with the District Plan and which ensured that section 106 monies were received on time. 

The Head of Strategic Finance and Property explained how the work around Harlow and Gilston Garden Town development had been funded and of the possibility that funding could be withdrawn.  He suggested that the Member write to the Head of Planning for a definitive response on this issue and also moving forward on governance issues. 

It was moved by Councillor Ward-Booth and seconded by Councillor Townsend that the recommendations, as detailed, be approved.  After being put to the meeting and a vote taken, the motion was declared CARRIED.

RESOLVED – that (A) the Executive be advised that Members have noted the guidance to officers, that the budget proposals should be based on a Council Tax increase of £5, contract inflation up to 4%, there be no inflation in other goods and services budgets and that the provision for the national pay award will be up to 3% (effectively 2.75% as 0.25% of the pay provision this year will be carried forward as a result of the 1.75% final pay offer from the employer’s side);

(B)        Members noted that the comprehensive spending review savings to be implemented in 2022/23 and 2023/24 as agreed by council in March 2021 and acknowledge the requirement of council that compensating savings, delivered to the same timescales, have to be put in place and reported to the next council meeting should the Executive decide that any savings proposals should not proceed, or are reduced by 10% or more.

(C)        Members welcomed the Collection Fund updated estimate that the Business Rates deficit be spread over 3 years and be met in full by changes to the appeals provision removing a £0.900 million pressure on the General Fund and the forecast increase in Local Council Tax Support cases has not materialised and the Council Tax Base is now forecast to increase in future years;

(D)       The assumption that the Transforming East Herts Programme will not start to result in revenue savings until the latter half of 2022/23 and into 2023/24, be noted.

(E)         Noted that the Executive had agreed: the re-phasing of the capital programme and revenue impacts of capital financing;  that existing minor projects should be subject to a full value for money test before proceeding; and that no new projects may come forward for the capital programme unless they are able to cover the capital financing costs in full or mitigate significant increases in revenue costs;

(F)  The revised savings requirements of £0.967  million  in 2022/23, £1.520 million in 2023/24 – 2025/26 rising to £1.901million in 2026/27 be noted; and

(G)   Noted that the Executive had agreed that all service areas should review fees and charges and ensure that, where the council has discretion to set the charge, that charges should be set so as to: recover full costs; concessions should be explicitly linked to an Equalities Impact Assessment; and that services which are not currently charged for the introduction of a charge should be considered unless the service is provided generally under a statutory provision.